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“SCARRABELOTTI recommends remuneration funding as the most effective method of financing Division 13A Exempt and Deferred share plans; these are then reallocated to the share plan which acquires shares on behalf of employer.” |
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Aequum Managing Director
Employee benefits …'“By investing pre-tax dollars in the ESOP, employees acquire (depending on their marginal tax rate) up to twice the number of shares they could have purchased using post-tax savings.” Employer benefits ...“Remuneration funding means, for the employer, a tax deduction to the company for every dollar contributed to the ESOP” |
Funding
‘13A’ Share Plans SCARRABELOTTI
recommends remuneration
funding as the most
effective method of financing Division 13A Exempt and Deferred share plans. Remuneration
funding means that the employee
sacrifices a portion of salary, bonus, or profit share. These funds are
then re-allocated by the employer to the share plan which acquires
ordinary shares in the
employer’s company on behalf of the employee. …
Employer benefits Remuneration funding means that the sacrificed salary (bonus or profit share) is allocated to the share plan on a pre-tax basis. In other words, by investing pre-tax dollars in the ESOP, employees acquire (depending on their marginal tax rate) up to twice the number of shares they could have purchased using post-tax savings. Remuneration
funding means, for the employer, a tax deduction to the company for
every dollar contributed to the ESOP.
A contribution to the ESOP is just like a contribution to wages or
superannuation, and as such is a tax-deductible cost of running the
business. Alternative ESOP Funding Mechanisms
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